TVS hits the streets with Neo, Apache

The Jakarta Post, Jakarta

TVS Motor Company, a leading two-wheel manufacturer in India, is confident the launch of its Neo and Apache motorcycle brands will help the company make a splash in the Indonesian market.

TVS Motor chairman Venu Srinivasan said he was upbeat the company's Indonesian unit, TVS Motor Company Indonesia, would be able sell up to 100,000 units in its first year of operations, despite the strong competition from more established manufacturers in the country.

In order to meet this sales target, the company specially designed its two new small-engine capacity models, Neo and Apache, to satisfy the unique characteristics of Indonesian buyers, he said.

The motorcycles will be sold at prices ranging from Rp 9 million to Rp 11.8 million, off the road (excluding tax). As an initial step, the motorcycles will be available in Jakarta and West Java.

Not only aiming to capture the local market, TVS Motor, which exports motorbikes to 40 countries, will turn its Karawang plant near Jakarta into its distribution center for the Southeast Asian market.

The Karawang plant, built with a total investment of about US$50 million, has the capacity to produce 300,000 units a year. It is the company's first overseas plant.

TVS Motor, which has 30 subsidiaries, sold 1.5 million units last year. The company's total revenue reached $2.7 billion in 2006.

The company expects the Karawang plant will be able to book a profit within the next five years.

TVS plans to double its investment in the plant to $100 million in the next three years, to boost the production capacity of the 20-hectare Karawang plant to one million units.

"Our first goal is to be able to sell at our current capacity of 300,000 units," Venu told The Jakarta Post recently. He added that TVS Motor would start exporting units from the Indonesian plant next year.

Indonesia is among the largest motorcycle markets in the world. According to figures from the Industry Ministry, motorcycle sales in the country stood at 4.5 million units last year, and are expected to reach five million units in 2007.

Japanese motorcycles dominate the market. Honda has a 51 percent market share, followed by Yamaha (32 percent) and Suzuki (12 percent).

Chinese-made motorcycles have tried to make inroads into the market over the last five years, but with little success.

Director of sales and marketing at TVS Motor, K. Vijaya Kumar, said the company would offer motorbikes with features that set them apart from other bikes in the market.

"We are the first bebek motorbike with an automatic and semi-manual clutch on the same vehicle," said Vijaya, adding that TVS Motor's selling point would be quality instead of lower prices.

Venu said this feature was the result of a two-year study of the characteristics of Indonesian consumers, who he referred to as "very demanding and unforgiving".

"If you make a mistake, you will not get a second chance. You have to do it right the first time," he said. "We have to be very sensitive to the needs of the consumers in different areas."

TVS Motor, which controlled 18 percent of the Indian motorcycle market in 2006, will focus on producing bebek (scooter) motorcycles which it says best suit the needs of Indonesian consumers. (12)
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